May 13, 2020

Axios China

Welcome back to Axios China. I hope you're having a great week. Today we've got trade war lobbying, a new Cold War, polling in Taiwan, and lots more.

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⚡️Situational awareness: The FBI sounds an alarm over Chinese attempts to steal coronavirus research. Go deeper.

1 big thing: The "new Cold War" started in China

Photo Illustration: Sarah Grillo/Axios. Photos: Alex Wong/Getty Images and Lintao Zhang/Getty Images

A growing number of experts are warning against what they call a "new Cold War" with China. But many Chinese Communist Party elites already view the rest of the world as a staging ground for competition between China and the United States.

The big picture: The current U.S. debate over China policy is essentially a response to the great power rivalry that China's leaders have already fully embraced.

What they're saying: Richard Haass, president of the Council on Foreign Relations, last week wrote that a new Cold War would mean "confronting China" would become "the organizing principle of U.S. foreign policy."

  • "This would be a major strategic error," wrote Haass. "It reflects an out-of-date mind-set that sees dealing with other major powers as America’s principal challenge."

Driving the news: The coronavirus pandemic has only accelerated the downward spiral in U.S.-China relations. “Both governments are trying to profit domestically off the other's failures," Rachel Esplin Odell of the Quincy Institute for Responsible Statecraft told USA Today.

First things first — no one actually wants another Cold War.

  • China's leaders want to maintain the pre-Trump status quo, which for them means establishing dominance over key elements of the future global economy and society, such as 5G and internet governance, and stamping out support for liberal democratic norms at home and undermining them abroad.
  • When Chinese government officials criticize what they explicitly call a "Cold War mentality" in the U.S., they aren't calling for an end to ideological competition or great power rivalry, but rather to U.S. attempts to stymie Beijing's plans.
  • China hawks in the U.S. aren't calling for a new Cold War either, but it's a risk they are willing to take in order to push back against an expansive authoritarian power.
  • As Senator Marco Rubio, a leading China hawk, told me in an interview for "Axios on HBO," the relationship needs rebalancing, but a new Cold War is "not the outcome we desire."

Background: The Chinese Communist Party has two different messages — one intended for the rest of the world and one intended for party members who govern the country.

  • "If you read speeches that Xi Jinping would give at Davos, or at the Boao Forum, it would contain a lot more language about cooperation, mutual aid, and peaceful and respectful diplomacy between China and other countries, and China and the United States," Victor Shih, an associate professor of political economy at UC San Diego, told Axios.
  • "But if you look internally on foreign policy by Chinese leaders or Chinese experts and the government, those things tend to frame things as global competition between the U.S. and China."

That helps explain why U.S. experts who blame the U.S. for firing the opening salvos of a new Cold War have largely misread the Chinese Communist Party's intentions.

  • "China can best be understood as a regional power that seeks to reduce U.S. influence in its backyard and to increase its influence with its neighbors," wrote Haass.

What Xi Jinping really wants: In one key speech given to party members in 2017, for example, Chinese President Xi Jinping called for China to become “a global leader in terms of composite national strength and international influence" by the year 2035, and he said that China is “moving closer to the center of the world stage."

  • Xi is interested in a different kind of political and economic dominance, without taking on a U.S.-style mantle of responsibility, such as serving as the world's policeman.
  • "The challenge Beijing represents is not to Washington’s status in Asia, but to the nature of the global order’s predominant values," Dan Tobin, a faculty member in China Studies at the National Intelligence University, wrote in congressional testimony on March 13.
  • "While this rivalry differs in many respects from the Cold War, one of the most important differences is that it is a competition to define the rules and norms that will govern an integrated, deeply connected world rather than a world divided into competing camps."

The bottom line: Some U.S. experts deny China's global ambitions, while others exaggerate its threat.

  • My thought bubble: Neither of these approaches is an effective response to the party's true intentions.
2. Scoop: Bob Dole is lobbying for Chinese-owned chemical company

Mike Pence and Bob Dole at the Republican National Convention, July 18, 2016. Photo: Brett Carlsen/Getty Images

Former Republican Sen. Bob Dole has registered to lobby on behalf of Wanhua Chemical (America) Co., Ltd., a Texas-based firm whose Chinese parent company is caught up in the U.S.-China trade war.

Why it matters: Lobbying by former U.S. elected officials on behalf of the Chinese government or companies it controls has raised concerns that Beijing may be able to influence the U.S. domestic political process — especially given vague disclosure rules.

What's happening: Dole works for law firm Alston & Bird and is receiving $150,000 for outreach to the U.S. House and Senate on behalf of Wanhua Chemical on "issues related to U.S. trade investment policy," according to first-quarter filings from the Senate lobbying disclosure database.

  • Wanhua Chemical Group's largest shareholder, holding 21.59% of its shares, is an entity owned by a Chinese municipal government, according to Wanhua's 2019 annual report.

Alston & Bird only registered its contract with Wanhua in the Senate database, not the Foreign Agents Registration Act (FARA) database under the Department of Justice, which has more stringent disclosure requirements.

  • That's because under current interpretation of the FARA law, some U.S.-based entities with foreign parent companies may be considered American companies, meaning they don't necessarily trigger the FARA registration requirement.

What they're saying: Alston & Bird does not disclose the minority stake a Chinese government-owned entity holds in Wanhua Chemical Group. But it does state that the work of its lobbyists, including Dole, could potentially benefit the Chinese company directly.

  • Alston & Bird, Dole, and Wanhua Chemical did not respond to multiple requests for comment.

FARA is notoriously vague, however, and another consulting company came to a different conclusion about the need to register as a foreign agent for its work with Wanhua.

  • AUX Initiatives LLC, a DC-based government affairs consulting firm, filed a FARA registration for its contract with Wanhua Chemical US Operations LLC in August 2018 "out of an abundance of caution," according to documents obtained from the Department of Justice website.

The bottom line: The current interpretation of FARA appears to have loopholes that allow companies with clear ties to the Chinese government to avoid registration — and those who lobby for them to disclose very little about those activities.

Read the full story.

3. Pew's first poll in Taiwan found mostly negative views on China
Reproduced from Pew Research Center; Chart: Axios Visuals
Reproduced from Pew Research Center; Chart: Axios Visuals

In its first-ever research survey conducted in Taiwan, Pew Research Center has found the vast majority of Taiwanese hold a favorable view of the U.S., while most Taiwanese have an unfavorable view of mainland China.

Why it matters: Beijing has long hoped Taiwan will eventually choose to be unified with the mainland. Taiwanese attitudes toward China suggest this is doubtful.

Details: Views toward China tracked closely with political leanings.

  • A large majority of Taiwanese who align with the Democratic Progressive Party (DPP), which views Beijing with distrust, expressed support for closer political and economic ties with the United States. Few DPP supporters wanted closer ties with China.
  • But a majority of Taiwanese who align with the Kuomintang (KMT), which is more pro-Beijing, said they support closer political and economic ties with both China and the U.S., and they view both countries positively.

Most Taiwanese, regardless of political affiliation, viewed the U.S. positively and supported closer political and economic ties with America.

  • What they're saying: "The highest level of enthusiasm for [closer U.S.-Taiwan political ties] comes from those who support the DPP (91%), those who identify solely as Taiwanese (84%) and those ages 18 to 29 (82%)," Pew researchers wrote.

The bottom line: In Taiwan, a close relationship with the U.S. has bipartisan appeal, but perceptions of China are very polarized.

4. College Dems and Republicans denounce racism and CCP

Illustration: Lazaro Gamio/Axios

The bipartisan consensus on China may have fallen apart in Washington, but it's still going strong on American campuses.

What's happening: Dozens of leading members of both the College Republican National Committee and the College Democrats of America, representing universities in more than 45 states, have released a joint letter today that calls for the permanent closure of Chinese government-funded Confucius Institutes on all U.S. campuses, protections for students and campus groups that are vulnerable to Chinese government coercion, and condemnation of anti-Asian racism.

What they're saying: "The Chinese Communist Party’s actions pose an immense threat to academic freedom and to human dignity. It is imperative that we distinguish this totalitarian regime from the Chinese people, whom we must steadfastly defend from abhorrent acts of xenophobia, racism, and hatred."

Why it matters: Young people are showing Congress it's possible to denounce both China's authoritarianism and anti-Chinese racism in America at the same time.

5. What I'm reading

Beef Down Under: Bristling at calls for coronavirus inquiry, China cuts Australian beef imports (Washington Post)

  • "China appears to be following through on a warning conveyed in April by its ambassador, Cheng Jingye, who said China could stop purchasing key Australian agricultural products if Canberra moves ahead with an inquiry proposal that has become highly sensitive for the Chinese government."

Trade woes: Trump "not interested" in reopening U.S.-China trade deal (Reuters)

  • U.S.-China trade fell in the first four months of 2020, with China falling short of commitments to increase U.S. exports.
  • Trump shot down a suggestion, which appeared in Chinese state media, that the U.S. might renegotiate the deal, saying on May 11, “I’m not interested. We signed a deal. I had heard that too, they’d like to reopen the trade talk, to make it a better deal for them.”

Viral alarm: When fury overcomes fear (Journal of Democracy)

  • A newly updated translation of Xu Zhangrun's incisive essay, first published online in February, that criticizes the cult of personality surrounding Xi Jinping and his response to the coronavirus. The author has been held incommunicado since its publication.
  • "Do you not see that although everyone looks to the One for the nod of approval, the One himself is clueless and has no substantive understanding of rulership and governance, despite his undeniable talent for playing power politics? The price for his overarching egotism is now being paid by the nation as a whole."
6. 1 book thing: How humanity became global

The collision of U.S.-China rivalry with a global pandemic seems to vindicate the argument that globalization has peaked — supply chains will shrink, multilateralism will fade, and human connections across oceans and borders will fray, writes Axios' Dave Lawler.

The big picture: This narrative holds that globalization took root after World War II, accelerated after the fall of the Soviet Union, and is now under threat as nationalism rises in the West and China rises in the East.

  • But that’s just a sliver of the story. A forthcoming book by Jeffrey Sachs traces globalization back to the very beginning — some 70,000 years ago.

Sachs demonstrates in "The Ages of Globalization" that since the great dispersal from Africa, humanity has been on an unceasing trajectory toward deeper linkages between more people across greater distances.

  • In the 14th century, it took 16 years for the bubonic plague to spread from China to Italy.
  • "In our time, the pathogen arrived within days by nonstop flight from Wuhan to Rome," Sachs writes.

The talk of "peak globalization" is "mostly noise," Sachs tells Axios.

  • As what Sachs considers the seventh age of globalization (the Digital Age) dawns, "we are intensely interconnected and we are going to remain that way."
  • We may bemoan the dangers of globalization, Sachs argues, but we're unwilling to give up its fruits. Over Zoom, he holds up his morning coffee, harvested in Indonesia.

Sachs believes we are at a "hinge moment" geopolitically, however, as the COVID-19 crisis heralds the end of American global leadership.

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